The cash account for Coastal Bike Co. at October 1, 20Y9, indicated a balance of $5,140. During October, the total cash deposited was $39,175, and checks written totaled $40,520. The bank statement indicated a balance of $8,980 on October 31, 20Y9. Comparing the bank statement, the canceled checks, and the accompanying memos with the records revealed the following reconciling items: A. Checks outstanding totaled $5,560.
B. A deposit of $1,050 representing receipts of October 31, had been made too late to appear on the bank statement.
C. The bank had collected for Coastal Bike Co. $2,120 on a note left for collection. The face of the note was $2,000.
D. A check for $370 returned with the statement had been incorrectly charged by the bank as $730.
E. A check for $310 returned with the statement had been recorded by Coastal Bike Co. as $130. The check was for the payment of an obligation to Rack Pro Co. on account.
F. Bank service charges for October amounted to $25.
G. A check for $880 from Bay View Condos was returned by the bank due to insufficient funds.
Instructions
1.Prepare a bank reconciliation as of October 31, 20Y9. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
2.Journalize the necessary entries. Refer to the Chart of Accounts for exact wording of account titles. (7 lines in Journal)
3.If a balance sheet were prepared for Coastal Bike Co. on October 31, 20Y9, what amount should be reported as cash?
Amount Descriptions
Adjusted balance
Bank error in charging check as $370 instead of $730
Bank error in charging check as $730 instead of $370
Bank service charges
Check returned because of insufficient funds
Company error in recording note collected by bank
Deposit of October 31, not recorded by bank
Error in recording check
Outstanding checks
Proceeds of note collected by bank, including $120 interest
Total adjustments
Coastal Bike Co.

Bank Reconciliation

October 31, 20Y9

1

Cash balance according to bank statement

2

Adjustments:

3

?

4

?

5

?

6

?

7

?

8

9

Cash balance according to company’s records

10

Adjustments:

11

12

13

14

15

16